US Dollar Gains as 10-Year Treasury Yields Hit Six-Month High UK House Prices May Fall up to 5 Percent in 2011, Says Rightmove NZ Dollar Outperforms as Stocks Rise After China Holds Off Rate Hike The New Zealand Dollar outperformed in overnight trade, adding as much as 0.3 percent on average against its top counterparts. The risk-linked currency capitalized on healthy risk appetite across Asian stock exchanges, with shares rising on news that China opted to hike bank reserve requirements by another 50 basis points rather than raising interest rates in earnest in the wake November’s CPI reading that revealed the fastest inflation in two and a half years. Interestingly, the typically safety-linked US Dollar was also broadly higher despite the advance in risky assets as US Treasury yields continued to soar across the maturity spectrum, boosting demand for USD-denominated assets. The yield on the benchmark 10-year note rose to 3.3849 percent, the highest since early June. Last week, 10-year yields added 314bps, marking the largest 5-day increase in 16 months. UK House Prices dropped for the second month, sliding 3 percent in December according to a report from Rightmove Plc, an online listing for for-sale properties. Rightmove commercial director Miles Shipside said “Sellers are going to have to price more competitively in 2011,” with prices falling between 3 to 5 percent.

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